* Oil drops about $4.50/barrel, limiting market losses

* Apple leads tech sell-off on poor outlook

* Coca-Cola, Wal-Mart, Caterpillar support the Dow higher

* Dow 0.2 pct higher, S&P 500 flat, Nasdaq falls 0.2 pct (Updates to midday)

By Walter Brandimarte

NEW YORK, July 22 (Reuters) - The Dow edged up on Tuesday as a drop of about $4.50 in oil prices added to positive sentiment from Caterpillar's strong earnings, offsetting declines in tech shares, including Apple.

U.S. front-month crude CLc1 declined about 3.5 percent, to $126.52 a barrel on the New York Mercantile Exchange as the U.S. dollar rose and supply concerns caused by Tropical Storm Dolly abated.

The oil drop was a welcome boost in a market that had plenty of disappointing news, including a steeper-than-expected profit decline at credit card company American Express (AXP.N: Quote, Profile, Research).

Shares of Apple (AAPL.O: Quote, Profile, Research), maker of the iPod and iPhone, were the top drag on both the Nasdaq and the S&P 500, after the company said late on Monday its current-quarter earnings will be well below Wall Street's targets.